Price Check on Aisle 3: Grocers Use A.I., Devices to Battle Amazon

[Updated 3/13/18 1:07 pm. See below.] If a shopper interacts with technology in a typical grocery store, it’s usually at the very end—as they are paying for their items.

That could be about to change, though. “Scanning loyalty cards at checkout is a lost opportunity,” says Eliahu Sussman, marketing manager at Aila Technologies, a Boston-area maker of retail devices such as digital kiosks and handheld scanners. “We do it at check-in and give [shoppers] personalized recommendations, coupons, a wayfinder in the store.”

The idea, he says, is to bring the supermarket circular—the printed weekly publication that advertises a store’s discounted items and other promotions—into the digital age. “This is doing what the circulars have done but on a personalized level,” Sussman says. “This improves the experience; an improved experience improves loyalty, which improves profits.”

Grocery shopping is big business: Total retail and food service sales in the United States amounted to about $5.32 trillion in about 38,000 stores in 2015, according to Statista. And it’s also an industry being buffeted by headwinds in the form of new technologies and e-commerce companies encroaching on the market. As time-strapped shoppers value the convenience and more personalized shopping experiences that e-commerce can provide, traditional grocers are responding by digitizing how shoppers interact with brick-and-mortar locations.

In the last month, Amazon (NASDAQ: AMZN) announced free two-hour delivery of products from Whole Foods Market, which the Seattle e-commerce giant bought last year. At the same time, Target announced same-day delivery of its products. The Minneapolis-based retailer delivers through Shipt, a startup Target bought in 2017. And about a week later, Walmart (NYSE: WMT) launched free delivery for many items at its Sam’s Club bulk retailer business.

“Retailers have to think about the ‘new shopper,’” says Sy Fahimi, senior vice president for product strategy at Symphony Retail AI in Dallas. “The attitude now is, ‘I expect you to show me an offer that is relevant, or I can quickly put you in the spam folder and never communicate with you … Next Page »